While locals obsessed over selling Cerner, an even bigger acquisition was quietly shaping the future of the local economy.

Last fall, one of Kansas City’s iconic companies sold for $30 billion after a brief bidding war. It was a local company with thousands of employees that was, in many ways, synonymous with the city, but with a footprint that stretched across the country.

No, we’re not talking about Cerner, we’re talking about Kansas City Southern Railroad.

The railroad, based here since its founding under the Grover Cleveland administration, was bought by Canadian Pacific for $31 billion. This news was buried on page six of the Kansas City Star and did not elicit a flurry of tweets from Mayor Quinton Lucas.

It’s a sign of how the discourse around the city’s economy is a bit skewed, according to Chris Kuehl, director of Armada Corporate Intelligence, which provides strategic advice, economic forecasts and business analysis to companies. clients.

“We often forget some of the most fundamental and enduring things,” says Kuehl. “People forget that Kansas City is a massive automobile manufacturing city. They forget aerospace. They forget transportation. Oddly enough, they forget agribusiness. How do you forget agribusiness in the middle of the agricultural sector? But, you know, we tend to overlook things like that because other things seem sexier.

The sale of Cerner, a local medical records technology company that was acquired by Texas-based Oracle for $28 billion, has been in the headlines for weeks, while the sale of Kansas City Southern, for more money, has gone unnoticed because, as Kuehl puts it “it’s a lot less glamorous to be a maritime hub.”

Kansas City, like so many mid-sized cities, often brags about having loose ties to technology. You’ll often hear local bigwigs refer to Silicon Prairie, as will bigwigs in other mid-markets who make dubious claims about technology ties using self-applied nicknames like Silicon Forest, Silicon Swamp, Silicon Mesa, and (woof) Silicon Holler.

Kuehl, whose opinion we asked after noting the evolution of retail in Johnson County, says that despite all the gloom over the sale of two local tech companies, Cerner and Sprint, there are many reasons to be optimistic about the local economy.

The strength of KC’s economy is its diversity

While many cities seem to come to terms with being known for one dominant industry – steel in Pittsburgh or oil in Dallas – it leaves a place at the mercy of trade winds they cannot reliably predict let alone control. Kansas City has a lot of irons in the fire, which Kuehl considers a good thing.

“We’ve always been a diversified economy,” he says. “We get excited when we lose a Sprint or a Cerner to a merger, but we always tend to forget that we’re a regional headquarters city, and even if we lose a bigger company that’s headquartered here, we take some six others who are going to have regional headquarters here.

Although having a national headquarters is a feather in the hat, having a regional headquarters is better for having a dollar in the pocket.

“Headquarters are often here, almost on a whim – someone says, ‘Hey, I like it here,'” Kuehl says. need something here, I will always need something here.

Selling Cerner will likely work out well for KC

If Cerner were to be sold, the company that bought him could hardly have been better for KC according to Kuehl. Oracle is based in Austin, Texas, and has significant operations there, in Nashville, and outside of San Francisco.

KC is close to its headquarters and other operations and also centrally located, which helps since Cerner employees tend to travel to help sell their system and train new customers.

“Once he was considered to be on the block, what really worried people was if a competitor bought Cerner,” he says. “It would have been a disaster because they would have moved all operations to their headquarters.”

Instead, Oracle, which had no existing product in the category, stepped in. “They just got into a whole other business, which means they’re going to leave it completely alone,” he says. “They didn’t buy Cerner to put them out of business. They bought Cerner to add to their business.

Retail decline is happening everywhere

We first contacted Kuehl to inquire about the state of commercial real estate near Corporate Woods, around the old Spring campus in central Johnson County. The once vibrant region has seen many businesses leave.

This is part of a national trend: according to Forbes, shopping centers representing a large part. But even newer malls now look different, he says.

“Every time you look at a strip mall, you think, ‘Oh, I wonder what store goes there,'” he says. “There are no stores. It will be an imaging center, a center emergency care, a dental center and a pet psychologist. There’s nothing to buy in there.

KC is well positioned for what is booming: the warehouse business

Kansas City was already the nation’s second-largest rail hub after Chicago. The Canadian acquisition of Kansas City Southern Railroad will have a huge effect on the city. As a result of the merger, an estimated 800,000 to 2.5 million additional freight containers per week will arrive in the center of the country. “It won’t all come here, but it’ll be all the way down the I-35 corridor,” Kuehl said. “The big change from a commercial real estate perspective is going to be warehouse and distribution.”

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